The Primo Water brand may be best known for its exchangeable water tanks, available at big-box stores, but the current Primo Brands is the result of two mergers. First, beverage company Cott Corporation acquired Primo Water in March 2020. Cott sold its coffee and tea business and rebranded as Primo Water to become a pure-play water company. Then, in November 2024, Primo Water and BlueTrition Brands merged, creating a beverage company focused on healthy hydration. In addition to Primo Water, it also includes brands like Poland Spring, Pure Life, and Saratoga.
Primo Water grew its revenue by 10% in 2024 to $5.2 billion, with a boost at the end of the year from the merger.
On an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis, the company's margins are about 20%, and its generally accepted accounting principles (GAAP) profit is closer to breakeven because of its heavy debt burden of about $5 billion.
Still, the company is delivering steady growth and offers investors a unique opportunity as a rare pure-play water consumption stock.
How to invest in water stocks
If you're interested in buying water stocks, the process is the same as it would be for buying any stocks. Just follow the steps below.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Why should you consider investing in water stocks?
There are a number of reasons to invest in water stocks. Let's take a look at a few of them.
- Water's essential nature means it will always be in demand and have a variety of applications.
- Water is a key input in everything from food and beverages to the cleaning of semiconductor wafers and hydraulic fracturing (fracking).
- Climate change is making water scarcer, driving up its value as well as innovative solutions to expand access to drinking water.
- Desalination, already used in tropical islands, is a growth opportunity in the water industry.
- Most water stocks are utilities, meaning they tend to be safe, recession-proof stocks.
Factors to consider when choosing water stocks
Not all water stocks are created equal. Let's review some things to consider before you make a purchase.
- Understand the business model. While most water stocks are utilities, not all are, and some also own other types of utilities.
- Dividend yield. Most water stocks offer some kind of dividend. It's a good idea to compare yields, payout ratios, and dividend growth history. For most investors, a reliable and growing dividend is a major reason to invest in water stocks.
- Growth potential. Most water stocks are slow-growth companies, but some have been more aggressive with acquisitions than others. Similarly, some have more exposure to growth markets or new technologies than others.
Is investing in water stocks right for you?
Water stocks have had an average 2025 through November, but most of these stocks have outperformed the S&P 500 index over the past decade. During one of the greatest bull market runs in stock market history, that's an impressive feat for a group of dividend-paying, recession-proof stocks in what's seen as the relatively safe and sleepy utilities industry.
With this track record, diversifying your portfolio with some water stocks looks like a smart move, especially given their position as a possible hedge against climate change.
